At least 100,000 signatures later…

DISCLAIMER: This is my personal opinion on the ICWC franchise. Nothing more, nothing less. This post therefore solely represents my own personal views and not those of any company I work, have worked for or will work for. I’ve also not proof read it, and I’m sure there are some typos and errors as a result. Comment if there are. Anyway, here goes…

I welcomed the announcement of the preferred bidder for the ICWC franchise. I felt that it was, on the whole, good news. Clearly, there are a lot of strong feelings that Virgin have done well and it shouldn’t be revoked. I don’t disagree that they’ve done well, but that doesn’t mean another company can’t improve upon the basis of what Virgin has given them.

This reminds me of the East Midlands Trains franchise from time gone by. Midland Mainline was an extremely popular TOC with passengers and they lost their franchise. Stagecoach won that round. They’ve done some controversial things, but by and large I think they’ve done well out of it. Back then, Stagecoach had an OK reputation but people still remembered the bad old days on South West Trains. The difference here is that First already have a lot of franchises and, clearly, people have bad experience on those as well as their bus operations.

Virgin Trains’ history has been potted. It started as the first franchisee of the West Coast Mainline with massive targets to upgrade and revolutionise the line with new trains and a massively upgraded infrastructure. I commend them for that. However, the infrastructure cost was borne by the government through Railtrack and its successor Network Rail. The trains are owned by banks, not Virgin. The track record, in the eyes of the passenger, is positive – I don’t disagree with that. In the eyes of the government, not so. Between 2002 and 2006, they were under a management contract (Virgin link). Admittedly, this was due to the failure of Railtrack. In 2007, they lost their then CrossCountry route to Arriva. The restated agreement gave Virgin until March 2012 to operate the franchise, which was extended to December 2012 in order to ensure a stable beginning to the new franchise.

Let’s have a look at First’s promises… although at this point, it’s important to note that there is little of what Virgin had in its bid available in the public domain – quite telling, in my view.

Transforming the on-board environment with a major refurbishment of Pendolino and Voyager interiors with new seats throughout and improved luggage space

I think this is good news. The seating and luggage layout on the fleets at the moment is wildly inefficient compared to, say, a Mk3. While a lot will not like the FGW Mk3s as they are now, they were as a result of passenger demand who complained about a lack of seats during the peaks. The resulting train, while high capacity, managed to make a train built in the 70s look almost new.

Introducing 11 new 125mph six-car electric trains for Birmingham – Scotland services which will create 12,000 additional seats per day. This is on top of the 28,000 new seats that will be provided by the additional 106 Pendolino carriages that are coming into service in time for the start of the new franchise. This means there will be 40,000 extra seats by 2016, compared with 2011

A lot of people have read the first sentence and missed the rest, making an assumption that they are re-announcing the Pendolino extension programme that will be completed under the current franchise. These new trains are vital to ensuring that the additional destinations, committed to, can be operated. It also allows diesel Voyagers operating between Birmingham and Scotland to be taken off wholly electrified routes.

I’ll take the next few into one, as they are all associated.

Improved journey time of 15 minutes for trains between London and Glasgow (Ed: meant to read improve journey time by…)

Introducing new direct services from London to Blackpool, Telford, Shrewsbury and Bolton providing a new direct link to the capital for more than 500,000 people

Doubling frequency of London to Preston services, and adding more capacity to Chester and North Wales

Improving connectivity with more stops at Nuneaton and Milton Keynes

I cannot dispute that the VHF timetable has led to quite astounding growth across the entire WCML. I can, however, say that the DfT had extremely heavy involvement in the timetable and could probably be best summed up as them having written it.

The new franchise does not benefit from the Moderation of Competition that Virgin benefitted and, arguably, thrived from. The MOC was designed to prevent government investment in the railway but it could be considered as a preventing any revolutionary new service from coming into being (more on that in a bit!). It terminated in March 2012, the original end date of the franchise.

Improving the journey time even further than at present between London and Glasgow is no mean feat, but also quite easy. It means running non stop between Euston and Preston, and knocking out a stop or two north of. This is made possible by doubling the frequency between London and Preston. More capacity to Chester and North Wales can be explained by the introduction of those 11 new trains earlier, releasing those pesky Voyagers. It could also be explained by Operation Thor, we cannot be sure yet.

Virgin tried setting up services to Telford and Shrewsbury during their previous franchise term while Wrexham & Shropshire were around. Unfortunately, it was a flip on Virgin’s PR of “little guy vs big corp” as in this case, Virgin were the ‘big corp’! They soon backed down.

Wrexham & Shropshire operated services from Wrexham through to London Marylebone via Shrewsbury, Tame Bridge Parkway (they couldn’t use Wolverhampton or Birmingham New Street due to that pesky MOC) and Banbury. Shortly after WSMR arrived, Virgin extended one of their services from Chester through to Wrexham. It could have been a coincidence, but more likely to act as a spoiler. Those services continue to this day.

VHF resulted in the removal of many intermediate stops and left stations on the Trent Valley most affected. London Midland entered the fill the gap with its hourly Crewe to London service and has aspirations to accelerate these services as part of Project 110. Project 110 was not possible until the termination of the MOC clause in the Virgin Trains contract. I look forward to the substantial reintroduction of stops to Nuneaton and more being placed into Milton Keynes. What that does to the timetable remains to be seen, but it should only add a few minutes to those trains that will additionally stop.

Reliability and punctuality improvements to improve Public Performance Measure (PPM) to over 90% (from current level of 85.9%) through targeted investment and a new Alliance with Network Rail.

The PPM measure for ICWC is of trains arriving within 10 minutes of time. The closest comparison with First is the TPE franchise. I believe that First provide an excellent level of transparency not seen elsewhere in the industry now with specific pages for each TOC explaining service disruption. Here’s the TPE example. The PPM of the TPE franchise tends to be above that of Virgin – normally pegging at around 92%.

That’s where the comparison with TPE must end. Many complaints have been made about the length of trains, and I agree – they’re short. There are many reasons for this, not least because the government have the final say on trains and refused to allow more coaches to be purchased a while ago. Any new franchisee on ICWC will continue with Pendolinos and Voyagers.

The new alliance with Network Rail is also very good news & I suspect Virgin would have followed through and provided this as well. Stagecoach (49% partner in Virgin Rail) have an alliance on their South West Trains and it, by and large, seems to have provided a marginal improvement during disruption in the short time it has been running. The real test will be in major disruption. Fortunately, the ICWC is able to provide lots of this so I will revisit the subject next December after First have had time to settle in.

Moving on, through fares.

Reducing Standard Anytime fares by 15% on average

Many people have said that only business people really buy these. By and large, that’s correct! I firmly am of the opinion that the cut will quite potentially stimulate demand further and attract more modal shift from air. The present price for a flexible ticket between London and Manchester for a day return on BA is £475, on Virgin it’s £296. On First, it’ll be £251. The real test will be to see how they apply fare rises to these, given that they are unregulated.

Installation of automatic ticket gates installation at 21 stations, including the major terminals of London Euston, Manchester Piccadilly, Liverpool Lime St and Glasgow Central

My views on ticket gates are well known – but this is a DfT requirement and everyone will have had to install them. Yes, even Virgin.

Investment in greater yield management capability to help grow demand with increased marketing and introduction of new customer loyalty programme.

There has been talk of the marketing budget in the first year being pegged at £20m. If this is true, then the results should be stark. While Virgin has the capability of attracting demand purely through the brand, this has been as a result of investment over many years. The current loyalty programme on Virgin is ‘Traveller’, which appears to act as a highly exclusive club for those who can afford expensive tickets. I believe the likelihood will be that the new programme will be more aligned with East Coast, which provides benefits to all based on spend.

I know for a fact that loyalty programmes can keep me hooked – I am a oneworld flyer by way of having status on British Airways. I see no real appeal to move to another airline alliance. Loyalty programmes clearly work if done correctly – frequent flyer, store cards, Nectar…

Smart ticketing introduced across the network

I won’t be saying anything on this matter due to my work with ITSO other than it being inevitable and all franchisees would have had this requirement.

Free upgraded high speed Wi-Fi, and enhanced mobile phone coverage following train refurbishment

Virgin’s wifi is already the fastest in the country. It is something that they should be highly commended for and proud of. Despite this, there are traffic congestion issues on the Pendolino fleet and I suspect that any franchisee would have aimed to dealt with these. I’m slightly curious about the mobile phone coverage note given that Virgin have already done work on this – but this might be adding femtocells into the trains. If it does, that’d be great.

Enhanced catering service offered, with increased at seat catering for customers

A lot have read into this as having the shop removed, as Arriva did on CrossCountry. First have already said to investors that they won’t be. So what happens here remains to be seen.

Improved information systems including new customer mobile apps

This can be done a lot of different ways – so this is fairly open ended.

Station investment includes improving accessibility, security and passenger information

This is another one of those things where all franchisees would say this. Again, remains to be seen what will happen so I’ll return and reflect upon this next year.

And finally,

Commitment to high quality service including a greater emphasis on customer facing staff on trains and at stations.

Morale will undoubtedly be going down over the workforce as a result of the announcement and the continuing one-sided media battle will be adding to this. First will need to do their best to fix this, and I’m sure they will.

In terms of customer service, the bar has been set. It has to be maintained or raised even higher. If the franchise financially fails, then that is a risk for First and the DfT. The DfT has decided that the risk is not sufficient for the franchise not to be issued to them.

I look forward to the future.